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How to Compensate Sales Teams

The B2B sales world continues to change rapidly and, as we wrote in our book Speed to Lead, the old SDR process is inefficient and leaves pipeline on the table. The world of a BDR hasn’t changed much in the last twenty or so years. 

They’re  still charged with helping to create demand via creative, personalized outreach while ensuring that inbound interest on our websites and lead forms is responded to and actioned on in a manner which screams “white glove experience”. Going a step further, many leaders are still coaching any Call to Action which asks for time on a prospect’s calendar. In this Age of the Anonymous Buyer, your prospect may not want to have a meeting yet. However, if your outreach doesn’t ask for a meeting and instead just gets the prospect onto your website…GAME ON!

At Qualified, we’ve wondered: how can we maximize pipeline with a growing team and what KPIs should we be setting as a company? We’ve seen both Inbound and Outbound motions have a significant impact on our business. This past year, we made a hypothesis that our SDR team (Known as Qualified Sales Representatives or QSRs) performs better with more focus and less context switching. Hybrid or “all-bound” models can absolutely work, but I’m sure you’ll agree that having an xDR wear the hats of what really should be two different roles results in neither role being done at peak effectiveness. While we began with a hybrid model at Qualified, we decided that role specialization was the direction we needed to go in and thus introduced the Inbound Sales Rep [ISR] and Outbound Sales Rep [OSR] roles.

But as a sales leader, you’re probably wondering - if I make this change, how should I compensate this team? How do I ensure that the team has the correct KPIs and incentives in place? 

We’re still learning, but let me share a bit about how we’ve been doing it:

Operate as one team with one target (why waste time fighting over attribution & influence, amirite?) while infusing incentives for different behaviors; by doing this, we’ve been able to ensure that sales reps play a vital role within the broader distribution or sales team and understand their individual role in contributing to that shared pipeline target.

For our ISRs, we want to ensure that each visitor to our site has a VIP inbound experience. There is obviously a pipegen component, but beyond that, Qualified has enabled us to build unique metrics into our compensation plans such as:

For our OSRs, we want to ensure maximum go-to-market effectiveness; so, beyond pipegen, we compensate on metrics such as:

Why? If our BDRs are focused on the right outreach (the kind that prompts a high-value prospect to visit your website, not the kind that results in a high-value prospect asking off of a target list), we know we’re on the cusp of creating “magic moments”; those engagements will convert at somewhere between 30-40%. These metrics are mostly measured in your sales engagement platform like Outreach, Salesloft, or Groove. We want to ensure that our OSR team is driving conversions and visits to the website; not simply sending as many emails or making as many cold calls as they can.

Together, all of our sales reps are measured on a shared pipeline target, the number of Stage 1 opportunities, Stage 2 opportunities and, of course, Closed Won opportunities.

By having this compensation structure, we’re able to ensure that our Qualified Sales Reps are maximizing their effectiveness and ensuring both a VIP inbound experience and maximum outbound coverage, enabling our team to hit and exceed our shared pipeline target.

Posted on
April 21, 2022
by
Ilan Kopecky

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